The Crypto Fear & Greed Index, which measures investor sentiment across digital asset markets, has shifted into “greed” territory for the first time since the $19 billion liquidation event in October that triggered a broad retreat from altcoins.
According to a Thursday update, the index rose to 61, signaling a notable improvement in market sentiment after several weeks spent in “fear” and “extreme fear” zones. Just one day earlier, the index stood at 48, placing it in neutral territory.
Investor sentiment had sharply deteriorated on Oct. 11, when roughly $19 billion was wiped from crypto markets. In the weeks that followed, the index recorded some of its weakest readings on record, repeatedly falling into the low double digits throughout November and December.
Sentiment indicators like the Crypto Fear & Greed Index are often used by traders as a gauge of market psychology, helping them assess whether conditions are more favorable for buying, selling, or remaining cautious.
Bitcoin surges to two-month peak
Overall market sentiment has started to lift alongside Bitcoin’s recent rally. Over the past week, Bitcoin climbed from $89,799 to a two-month high of $97,704 on Wednesday, according to crypto data aggregator CoinGecko.
The last time Bitcoin traded above $97,000 was on Nov. 14, though the Crypto Fear & Greed Index was then in “extreme fear,” reflecting panic as the asset tumbled from its all-time highs.
The index gauges market sentiment using a mix of indicators, including price volatility of major cryptocurrencies, trading volume, market momentum, Google search trends, and trader activity on social media.
Holder sell-off seen as healthy
Analysts at market intelligence platform Santiment noted in a Wednesday X post that Bitcoin holders have been offloading coins over the past three days, with a net decrease of 47,244 addresses. The team said this reflects retail investors exiting due to “FUD and impatience,” which they consider a normal and healthy market behavior.
“When the number of non-empty wallets declines, it signals that retail investors are stepping back—a positive sign,” they explained. “Likewise, lower Bitcoin supply on exchanges reduces the risk of a large selloff.” They added that this recent price surge has also been supported by a seven-month low of 1.18 million BTC held on exchanges.
In general, a smaller Bitcoin balance on exchanges is seen as bullish, as it indicates that holders are keeping their coins in private wallets and are less likely to sell in the short term.
